Google Maps130 Central Avenue in Jersey City, where Local 148 of Production Workers of America.

The president and secretary-treasurer of a Jersey City-based union were arrested this morning on charges they embezzled hundreds of thousands of dollars from the union by giving themselves unauthorized salary increases, bonuses, and paid vacations, U.S. Attorney Paul J. Fishman announced.

Stephen P. Arena, 55, of Nesconset, N.Y., and David J. Caivano, 55, of Bloomfield -- officers of Local 148 of the Production Workers Union -- were arrested at their residences by special agents from the Department of Labor–Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.

Arena and Caivano are charged in a 29-count indictment unsealed today. The defendants are expected to appear this afternoon before United States Magistrate Judge Esther Salas in Newark federal court.

Local 148 of the Production Workers Union of the Allied, Novelty, and Production
Workers of America, located on Central Avenue, represents workers from various trades, including bus drivers, hotel workers, and factory workers. The union also sponsors the Production Workers Union-Local 148 Welfare Fund, an employee benefit plan that provides health benefits to some of Local 148’ s members.

As president of Local 148, Arena is responsible for conducting the union’s day-to-day operations. He is also a trustee on the Welfare Fund’s Board of Trustees.

Caivano, the union's recording secretary/secretary-treasurer, is responsible for the union’s finances, maintaining its books and records, and keeping a correct record of all union proceedings, among other duties. Caivano is also the administrator of the Welfare Fund.

Authorities say that Arena and Caivano conspired to embezzle in excess of $375,000 by giving themselves unauthorized salary increases and bonuses that furthered no legitimate union purpose.

Authorities say Arena and Caivano stacked the union’s executive board – the governing body of the union – people who provided no oversight of their actions as union officers, then approved significant salary increases and bonuses for themselves.

Caivano even falsified the minutes of the union’s executive board and general membership meetings – creating the illusion that the increases and bonuses had been presented and approved at the meetings, the indictment said. In every year from 2005 through 2007, Arena and Caivano gave themselves $300 a week salary increases and large year-end bonuses.

In addition, Caivano, after beginning to draw compensation from the union’s welfare
fund in early 2007, gave himself a $300 a week salary increase from that fund, as well as holiday bonuses.

From 2006 through 2010, Arena traveled to Florida for union conferences and charged his union credit card when he stayed extra days, causing the union to pay several thousand dollars in hotel bills for personal expenses.

Caivano signed the union checks that paid for these expenses, which were not approved.

Count One charges Arena and Caivano with conspiracy to embezzle money from Local 148 related to the fraudulent salary and bonus scheme; Counts Two through 19 charge Arena and Caivano with embezzling money from Local 148 related to the fraudulent salary and bonus scheme; Counts 20 through 24 charge Caivano with embezzling money from Local 148’s Welfare Fund, an employee benefit plan, related to the fraudulent salary and bonus scheme; Counts 25 through 29 charge Arena and Caivano with embezzling money from Local 148 related to the Florida hotel charges.

The maximum potential penalty per defendant per charge is five years in prison and a fine of $250,000.

The government is represented by Assistant U.S. Attorney Anthony Moscato and V.